Are we finally seeing signs of a pullback on USD/JPY’s steady climb?
The pair retreated after hitting a ceiling at the 162.00 major psychological mark and looks poised for a dip to the nearby Fibonacci retracement levels.
Here’s the correction zone I’m watching on the 4-hour chart.
USD/JPY: 4-hour
USD/JPY 4-hour Forex Chart by TradingView
This yen pair has been on bullish run for the better part of June, as cooling Fed rate cut expectations and the lack of actual currency intervention from the Bank of Japan (BOJ) sustained the climb.
However, traders seem to be feeling nervous as USD/JPY tests another key psychological barrier, fearing that Japanese officials might finally step in the forex market to keep their currency from dropping.
Besides, jitters ahead of the U.S. June NFP report are also coming in play.
Can the jobs report revive dollar strength this week or are we about to see bigger dips for this pair?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Japanese yen and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!The Fib tool shows that the next potential support zone is at the 38.2% level around S1 (159.29) near the 100 SMA dynamic inflection point. This moving average is above the slower 200 SMA to confirm that the uptrend is more likely to resume than to reverse.
Still, a larger dip could find more buyers at the 61.8% Fib that’s closer to the ascending trend line that’s been holding since May. This is also in line with the 200 SMA dynamic support and S2 (157.71), as well as a former resistance zone.
Look out for a continuation of the USD/JPY rally back up to the swing high at R1 (161.83) if any of these Fib levels are able to keep losses in check.
Do you think the upcoming NFP report or potential jawboning from BOJ officials could translate to a major pullback for this pair soon?